Who is responsible for paying federal taxes on beer within the 3-tier system?

In the context of the 3-tier system for alcohol distribution, the brewery is responsible for paying federal taxes on beer. This is because the payment of federal excise taxes is imposed on the producer or manufacturer of the beer. When a brewery produces beer, it must register with the Alcohol and Tobacco Tax and Trade Bureau (TTB) and is then responsible for reporting and remitting the excise taxes based on the volume of beer produced.

Once the brewery has paid the federal taxes on the beer it produces, it can sell that beer to wholesalers, who then distribute it to retailers. This system ensures that the tax is collected at the source of production. Wholesalers and retailers handle the distribution and sale of the beer but do not incur the excise tax liability directly; their roles are focused on moving and selling the product rather than being responsible for the taxation related to its production.

Consumers ultimately pay for the beer at retail prices, which may include the cost of taxes embedded in the price, but they are not directly responsible for paying the federal excise taxes. In summary, the brewery being responsible for federal taxes maintains the integrity of the 3-tier distribution system while providing a clear point for tax collection on alcohol production.